Record low interest in U.S. Gulf of Mexico leases amid oil price slump

NEW YORK Aug 19 (Reuters) - A U.S. government sale of oil
and gas drilling leases in the western Gulf of Mexico attracted
the lowest number of bids on record on Wednesday as slumping oil
prices kept producers from plowing money into expensive offshore
prospects.

The yearly sale, held by the Bureau of Ocean Energy
Management (BOEM), attracted $22.7 million in high bids, the
smallest in the western Gulf since 1983 when leases were first
broken down into regions, the BOEM said, reaping just one fifth
of the value of last year's offers.

"The continuing drop in oil prices and low natural gas
prices obviously affect industry's short-term investment
decisions," BOEM Director Abigail Ross Hopper said in a
statement, also stressing the long term potential of Gulf of
Mexico oil and gas production.

U.S. oil prices have slumped over the past year due
to oversupply, from over $107 a barrel in June 2014 to $40 on
Wednesday, denting oil producers' profits and leading to
thousands of industry job cuts. Even cheaper onshore
developments have stalled as companies reassess their yearly
budgets.

Australia's BHP Billiton was the most active with
26 bids. BP made one bid, Colombia's Ecopetrol
made four, three of which were made jointly with Anadarko
Petroleum, and Houston-based Peregrine Oil and Gas made
two.

Last year saw 93 bids on 81 tracts totaling $110 million in
high bids. In 2012, when oil prices fluctuated between $100 and
$80 a barrel, there were 131 bids on 116 tracts, with high bids
hitting $133 million, a BOEM spokesman said.